Hoover set to lose pounds 20m over free flights fiasco: Task force moves in to sort out chaos after three top executives are fired

HOOVER FIRED three top executives yesterday after admitting that its ill-fated and controversial free flights offer will lose it at least pounds 20m.

The company's US owners meanwhile sent a task force into Hoover's South Wales headquarters with orders to clear up the wreckage from the sales promotion that succeeded beyond its wildest dreams.

Under the offer anyone buying a Hoover product costing more than pounds 100 was eligible for two free return air tickets to the US or Europe. Customers purchasing the cheapest qualifying product, a pounds 119 vacuum cleaner, could receive two tickets to New York, costing Hoover more than pounds 500.

The company appears to have gambled on people being put off by the small print attached to the offer. But it underestimated the tenacity of the buying public when confronted with such a gift horse.

Hoover refused to say how many customers had entered the promotion or what the total bill would be. According to some estimates, however, up to 100,000 people may have applied for free tickets - suggesting that the cost will be much higher than pounds 20m.

The company is negotiating with British Airways to buy up to 20,000 extra tickets on scheduled flights to New York and European destinations to meet its commitments.

The promotion was at the centre of controversy almost from the minute it was launched last August, with customers flooding into shops selling Hoover products but then finding it difficult in some cases to obtain their free flights. Labour called on the Department of Trade and Industry to investigate while trading standards officers in Mid-Glamorgan, where Hoover's Merthyr Tydfil head offices are based, received more than 300 complaints.

Although the offer ceased at the end of January, customers may apply to travel on flights any time up to next April.

Many consumers bought Hoover products they did not want simply to obtain free flights. The result was a flourishing second-hand market in brand new domestic appliances still in their boxes.

In a statement issued last night Maytag Corporation, Hoover's US parent, apologised to its customers and said the offer, available in the United Kingdom and Ireland, had led to 'tremendous difficulties plus significant unanticipated costs'.

Leonard A Hadley, chairman of Maytag, said: 'These promotions were flawed and we are taking strong steps to rectify the situation. We regret the inconvenience it has caused Hoover customers in the United Kingdom and Eire.'

The executives dismissed yesterday are William Foust, managing director of Hoover Limited and president of Hoover Europe, and the two directors most closely involved with the promotion - Brian Webb, Hoover vice-president of marketing, and Michael Gilbey, director of marketing services.

Maytag, which owns a string of other domestic appliance brands in the US, said that a reserve set up to cover the cost of the promotion would not be enough, forcing it to take a one-off charge against first quarter profits of dollars 30m to cover extra costs.

When the ill-fated promotion was launched Hoover calculated it could buy all the tickets it needed cheaply through charter operators. However, Maytag said the travel operators retained by Hoover were unable to fulfil their contractual responsibilities in the light of demand.

A variety of hurdles were put in the way of customers. Receipts and application forms had to be sent off within 14 days; after that would-be travellers had to go through a lengthy procedure of nominating airports, dates and destinations.

Hoover also required customers to book accommodation and insurance through affiliated travel companies. Customers who booked separately were given the tickets only when they produced receipts.

According to a BBC1 Watchdog programme to be broadcast next Monday the travel company organising the offer, Free Flights Europe, used a system known as 'wising' deliberately designed to dissuade customers from taking up their free flights unless they spent at least pounds 300 on extra services such as car hire or insurance.

News
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Life and Style
tech
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
News
i100
Life and Style
life
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Graduate Pricing Analyst - 6 months / 1 year analytical experience

£20000 - £25000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Trainee Helpdesk Analyst / 1st Line Application Support Analyst

£18000 per annum: Ashdown Group: An established and growing IT Consultancy fir...

Senior Management Accountant

£40000 - £46000 per annum: Sauce Recruitment: Global publishing and digital bu...

Year 2 Teachers needed for day to day supply

£110 - £130 per day + Competitve rates of pay: Randstad Education Reading: Yea...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits